Friday’s NFP number out of the US missed market expectations, but combined with a lift in Average Earnings and a fall in the Unemployment Rate, the miss was not enough to dampen a USD rally as the market re-priced itself on some much needed positive news.
“USD Average Hourly Earnings m/m (0.5% v 0.3% expected)”
“USD Non-Farm Employment Change (151K v 189K expected)”
“USD Unemployment Rate (4.9% v 5.0% expected)”
As we spoke about last Friday, the market got its jump in Average Hourly Earnings (the biggest increase since 2009 mind you) and pounced all over it with the expectation that the Fed will use the figure in future rhetoric as we head toward lift-off number two.
Following the triangle breakout, we have been watching EUR/USD price action. As a continuation to last Thursday’s chart of the day, we have here zoomed into the 4 hour Fiber chart to show just how bullish USD (bearish EUR) that Friday’s news spike was.
After getting a little vertical, NFP soon stopped price in its tracks and the pullback has come. What’s most interesting is where price has paused, right back into a short term area of consolidation, giving any savvy bulls a chance to take some pips.
Is this a healthy pullback? Are shorts still trapped from the triangle break? Was the news enough to shift market sentiment? These are all questions you need to ask yourself and that we will be discussing on both the Forex News Centre and @VantageFX Twitter as we head into the week.
Chart of the Day:
Our last technical analysis post on trading gold was all the way back in November 2015.
Back then, we compared the gold and silver charts to try to find the best opportunity to use the levels in play to manage our risk around. Following that post, price faked lower, before a shift in fundamental market conditions has seen gold catch a bid and rally off its lows.
The weekly chart highlights the horizontal support zone that price has been playing with on either side for years. For clarity here, I have left only the single red line on the chart, being the top of the zone I had marked back in November.
Zooming into the daily is where things start to get interesting. The previously broken flag/bullish channel pattern is back in play, this time using the underside of the level to mark possible resistance.
Will gold’s recent rally be halted here?
On the Calendar Monday:
NZD Bank Holiday
CNY Bank Holiday
JPY Current Account
CAD Building Permits m/m
CAD Gov Council Member Lane Speaks
“Waitangi Day (named after Waitangi, where the Treaty of Waitangi was signed) commemorates the signing of the Treaty of Waitangi, New Zealand’s founding document, on that date in 1840.”
“Chinese New Year is an important Chinese festival celebrated at the turn of the traditional lunisolar Chinese calendar.”
Dane Williams – @VantageFX
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